Benchmark DSE index plunges to one-year low

Stocks have extended losses for the 13th straight session with the Dhaka Stock Exchange's benchmark index plunging to a one-year low.

The DSEX shed 52.6 points or almost 1 percent on Sunday to close at 5390.7—its lowest since May 30, 2017 when it was 5,373.

Analysts attributed rising interest rate and devaluation of Bangladesh Taka against the US dollar to the downslide of the market.

Former DSE president Ahmed Rashid Lali said, “Investors are diverting funds to the banks from the stock market hoping to get higher returns, pushing the market downwards.”

At present, several banks offer 10 percent interest rate against deposits, though it had come down to 5 to 6 percent at one stage.

Besides, Lali said, the first quarter results of the banks and financial institutions were not impressive, which had a negative impact on the market. 

Shanta Asset Management Limited CEO Mohammad Emran Hasan blames the dollar continuing to gain against taka for the sliding market.

“Foreign investors have been dumping stocks because of devaluation of taka against US dollar,” he said.

Hasan has also identified two more reasons - upcoming Eid and the national budget - behind the continuous fall of the market.

“Investors take a wait and see policy ahead of Eid and the national budget.”

Tanvir Ahmed, a retail investor, said, “I knew during the month of Ramadan the market usually remains dull, but this time the fall is larger than expected.”

The DSE turnover in value stood at nearly Tk 4 billion, down 19.7 percent over the previous session’s value.